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Initially you may only be making a tiny amount of money passively, and you might even want to re-invest that money so that it compounds and grows faster. But with some time, its potential to make enough passive income that you could quit your job or retire early.

Passive income can be a bit of a divisive topic. In general, passive income is any money you make without putting in much effort. The money will flow in without too much being required of you. In some cases it could be long-term recurring income, and in some other instances it could be short lived or inconsistent.

In some circumstances youll need to put in some effort up front, but then it wont need as much effort in the long run when youre making the money.

Exactly what qualifies as passive income is up for debate. Most lists which youll find online will include things like blogging, writing e-books, or creating your own course. Im not including those thoughts in this informative article because, in my opinion, they all require an excessive amount of effort to be considered as passive.

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Blogging will constantly require on-going work, either by yourself or from others which youre paying.  Selling ebooks or classes will require on-going customer support, plus youll need a consistent traffic supply in order to continue to make sales. It is possible and there are individuals who've been able to get it done passively, but they make up a small percentage of individuals who really set out to do it.

Ive been blogging full-time for ten years and Ive sold ebooks and classes in the past. Theyre great ways to make money, I simply dont consider these to be more passive, in the majority of cases. .

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Nearly any business can be a source of passive income if youre paying other people to run the business. This is true with website here both online and traditional businesses. This opens up even more possibilities than what will be recorded here.

Now lets have a peek at some of the greatest ways to make passive income. A number of them are investments that will need some money to start with. Other folks wont require any money to get started. In case you dont have the money to invest now, consider starting with the methods that dont require any money, and then use that money that you make to invest. .

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Your very first financial priority should be to develop an emergency fund that will cover all your living expenses for a few months. But dont put this money would be a checking account or savings account at a local bank which pays you a horrible interest rate. You can open a high yield savings account or money market account with an online bank which will earn a much better return for you.

My wife and I keep our emergency fund in a money market account with CIT Bank. At the moment (October 2018) CIT money market accounts are earning 1.85% APY and CIT savings accounts are earning 1.55% APY. Thats 22x the national average! Opening an account with CIT is fast and easy, and can be done online. .

Some companies consistently pay dividends for their shareholders. As a trader, you can re-invest the dividends to purchase more shares of the stock, or take the dividends in cash. Reinvesting will let you own more stocks, which leads to greater dividends in the future (ideally).

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The companies that consistently pay dividends tend to be large companies with a long history of success. Because of this, these investments tend to be considered less risky than the stock market in general.

Dividend stocks can be a terrific investment regardless of whether you want to reinvest each of the dividends on hold on to this stock for a long time, or use the income produced through the dividends.

For far more detail on the topic read Investing in Dividend Stocks in Investopedia. To get a list of these stocks, visit this collection out of Dividend.com and this collection from DividendValueBuilder.com.

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Peer-to-peer lending (or P2P) has become extremely popular in recent years. Borrowers and lenders can be paired up via a site or market. Instead of going to a bank, the borrower gets a loan from an investor.

In some situations the borrower may not have the ability to qualify for a loan via a traditional bank. And in many circumstances the borrower gets a better interest rate than they might receive from a bank. As an investor, you can earn a great return as well.